This headline result comes despite a 50% slow down in rental inflation over the past 12 months.
A firm dynamic of ‘location over size’ has emerged in PLC as corporate belt-tightening in the financial sector impacts on tenant choices. The most globally renowned areas have continued to forge ahead remaining top of the tenants’ wish-list.
New research from London Central Portfolio (LCP) shows that, on average, Knightsbridge is now achieving the highest weekly rents per square foot at £1.27 after a notable increase of 9.5% last year. Mayfair witnessed growth of 4% whilst Belgravia and Kensington held steady during 2012. These sought-after postcodes are all fetching rents above the £1.00 per square foot mark per week.
The increasingly fashionable Marylebone has also remained popular amongst London’s tenants.
This saw the largest rental increase of 10% over the same period, as its buzzy atmosphere and convenient links to Canary Wharf and Heathrow dominated tenant priorities. Marylebone is now catching up with the internationally favoured areas, achieving average weekly rents of 96p per square foot.
Small upturns were also witnessed for Paddington and Bayswater, South Kensington and Chelsea. These core areas saw rental increases of between 2% and 4%.
The areas more favoured by the British rather than international tenant, such as Pimlico and Notting Hill, have been hardest hit by the economic downturn, both witnessing rental declines. Covent Garden, a popular enclave for ‘City Slickers’ was the worst affected area last year – down 15% to 73p per square foot a week.